Airbnb battles headwinds as fee hike may boost profits, can Airbus soar past Boeing? Airbnb battles headwinds as fee hike may boost profits, can Airbus soar past Boeing? Airbnb battles headwinds as fee hike may boost profits, can Airbus soar past Boeing?

Airbnb battles headwinds as fee hike may boost profits, can Airbus soar past Boeing?

Equities 5 minutes to read
Peter Garnry

Head of Saxo Strats

Summary:  Airbnb heads into earnings with declining growth, war-related demand concerns, and oversupply worries. However, a recent fee hike and lower marketing expenses offer hope for improved margins. Investors also await news on geographical revenue split and the company's future growth trajectory. Meanwhile, Airbus boasts a strong post-pandemic recovery, outperforming Boeing and nearing market value dominance. Analysts expect positive earnings, potential delivery guidance lift, and colour on a cybersecurity acquisition. With 74% buy recommendations, Airbus seems to have investor confidence on its wings.


Airbnb: troubles brewing but fee hike helps

Airbnb reports FY23 Q4 earnings tomorrow after the US market close with analysts expecting revenue growth of 14% y/y and EPS of $0.68 up 45% y/y. While Q4 revenue growth is still double digit it will be the eight straight quarter of declining revenue growth has the post pandemic opening wave is adjusting the long-term structural growth rates. The concerns going into the earnings release are around demand hit from the war between Hamas and Israel, oversupply of overnight rooms and increased costs related to payments and insurance. Airbnb’s 2% guest fee hike for cross-border travel may offset these headwinds and expected lower marketing expenses are also expected to improve operating margin.

Another key focus for investors is on geographical split on revenue as the North America segment has dominated in the past but in Q3 last year the EMEA took over as the largest segment, but Asia Pacific and Latin America segments are still small and not growing. Airbnb was previously a darling stock and seen as one of the more successful consumer technology companies coming out of Silicon Valley, but sell-side analysts following the company are split on their ratings with 54% on hold and the consensus price target is actually 7% below the recent closing price. Based on expected free cash flow of €4.4bn this year Airbnb is valued at around 5% free cash flow yield.

Airbus: taking over the throne in aerospace?

Boeing was getting its mojo back late last year as the stock was back to the early 2021 levels on a total return basis, but then came another accident in January with an Alaska Airlines aircraft losing a fuselage panel in mid-air cruising. The accident added to investors uncertainty over Boeing’s lack of operational and production excellence that previously was its hallmark. As the chart below shows, the European aerospace giant Airbus has come through the pandemic in the best shape returning 17.7% since 1 January 2020 whereas Boeing shareholders are sitting on a 35.4% loss. For now investors like Airbus shares more than Boeing, and Airbus is close to overtake Boeing on market value, but in terms of revenue Boeing is still sitting on the aerospace throne.

Airbus reports FY23 Q4 earnings on Thursday after the European market close. Analysts expect revenue of €22.5bn up 9% y/y and EPS of €2.00 down 10% y/y. Airbus is still suffering from supply-chain bottlenecks and inflation pressures on materials, but the bright spot should be commercial aircraft revenue due to a strong December on deliveries. A key focus for analysts will be on a potential guidance lift on deliveries in FY24 and more colour on the potential acquisition of Atos BDS which will bring expanded cybersecurity capabilities into the company. Analysts are predominantly positive on Airbus with 74% of analysts having a buy recommendation with the current price target being 10% above the last price. It is also worth noting that the market is valuing Boeing at 24-month forward EV/EBITDA of 16.1x vs only 9.2x for Airbus.

Earnings this week

With almost 75% of the S&P 500 Index having reported the impact on equities from earnings is fast disappearing with macro increasingly taking over as the driver of market direction and volatility. This week will still deliver a lot of earnings releases and besides the highlighted earnings from Airbnb and Airbus, other key earning releases to watch are Shopify, Genmab, Schneider Electric, Applied Materials, and Deere.

  • Today: CSL, Arista Networks, Cadence, Waste Management

  • Tuesday: Japan Tobacco, Marriott, Airbnb, AIG, Coca-Cola, Shopify, Zoetis, Moody’s Ecolab

  • Wednesday: CBA, Sony, Heineken, Tokio, CME, EssilorLuxottica, Cisco, Occidental Petroleum, Barrick Gold, Genmab, Norsk Hydro, Kraft Heinz

  • Thursday: Schneider Electric, Stellantis, Southern Co, Applied Materials, Airbus, Deere, Safran, RELX, Pernod Ricard, Renault, Commerzbank

  • Friday: Eni, Sika, Swiss Re

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.